Personal Income Tax Law: Small Business Relief Act: elective tax.

Existing law, the Small Business Relief Act, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, authorizes a partnership or "S" corporation that meets certain other requirements to elect to pay an elective tax at a rate based on its net income, as specified, for the taxable year. The Personal Income Tax Law allows various credits against the taxes imposed by that law, including a credit against the personal income tax to a taxpayer, other than a partnership, that is a partner, shareholder, or member of an entity that elects to pay the elective tax authorized by the Small Business Relief Act, in an amount equal to a specified percentage of the partner's, shareholder's, or member's pro rata share or distributive share, as applicable, of income subject to the elective tax paid by the entity. The Personal Income Tax Law provides a credit against the taxes imposed by that law, not to exceed the net tax, as defined, payable under that law, to residents for specified taxes paid to another state on income derived from sources within that state. This bill would, for taxable years beginning on or after January 1, 2022, and before January 1, 2026, increase the maximum credit allowed to residents for specified taxes paid to another state by the amount by which their net tax, as defined, is decreased by the credit allowed to a partner, shareholder, or member of an entity that elects to pay the elective tax authorized by the Small Business Relief Act. This bill would also make a nonsubstantive change to the Small Business Relief Act. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would state that the requirement for additional information in a bill authorizing a new tax expenditure does not apply in this case. This bill would take effect immediately as a tax levy.